Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information

Segment Information

NOTE 9:    Segment Information

The Company’s reportable segments are strategic business units that offer different services to customers.  The Company has two reportable segments: Seismic Data Acquisition and Seismic Data Processing & Integrated Reservoir Geosciences.  The Company further breaks down its seismic data acquisition reportable segment into three reporting units: North America proprietary seismic data acquisition, international proprietary seismic data acquisition and multi-client seismic data acquisition.  The North America and international proprietary seismic data acquisition reporting units acquire data for customers by conducting specific seismic shooting operations for customers in North America (excluding Mexico) and worldwide.  The multi-client seismic data acquisition business unit licenses fully or partially owned seismic data, covering areas in the United States, Canada and Brazil.  The processing and integrated reservoir geosciences segment operates processing centers in Houston, Texas and London, United Kingdom to process seismic data for oil and gas exploration companies worldwide. The Company evaluates the performance of each segment based on Adjusted EBITDA, defined below.

The following table sets forth financial information with respect to our reportable segments (in thousands) (1):

	Three Months Ended March 31,
	2012			2011
	(Unaudited)			(Unaudited)
Revenue:
Data Acquisition
North America proprietary	$	64,404		$	38,689
International proprietary	75,043			117,141
Multi-Client	21,495			29,085
Subtotal Data Acquisition	160,942			184,915
Data Processing & Integrated Reservoir Geosciences	4,014			3,830
Eliminations	(1,458		)	(1,108		)
Total	$	163,498		$	187,637
Direct Operating Expenses:
Data Acquisition
North America proprietary	$	39,587		$	29,529
International proprietary	80,530			118,697
Multi-Client	5,309			167
Subtotal Data Acquisition	125,426			148,393
Data Processing & Integrated Reservoir Geosciences	2,971			3,006
Eliminations	(1,458		)	(1,108		)
Total	$	126,939		$	150,291
Depreciation and Amortization:
Data Acquisition
North America proprietary	$	3,767		$	3,590
International proprietary	12,444			13,710
Multi-Client	15,507			21,689
Subtotal Data Acquisition	31,718			38,989
Data Processing & Integrated Reservoir Geosciences	423			286
Corporate	1,201			1,262
Total	$	33,342		$	40,537
Adjusted EBITDA (2):
Data Acquisition
North America proprietary	$	23,782		$	7,925
International proprietary	(10,525		)	(8,975		)
Multi-Client	15,673			28,427
Subtotal Data Acquisition	28,930			27,377
Data Processing & Integrated Reservoir Geosciences	1,036			776
Corporate	(10,655		)	(9,100		)
Total	$	19,311		$	19,053
Reconciliation of Adjusted EBITDA to Net Loss
Adjusted EBITDA	$	19,311		$	19,053
Provision for income taxes	(940		)	(634		)
Interest expense, net of interest income	(12,739		)	(11,149		)
Other (income) expense (as defined below)	4,486			4,496
Depreciation and amortization	(33,342		)	(40,537		)
Net loss	$	(23,224	)	$	(28,771	)
Identifiable Assets: (at end of period)
Data Acquisition
North America proprietary	$	98,653		$	133,439
International proprietary	269,059			443,289
Multi-Client (3)	56,132			96,875
Subtotal Data Acquisition	423,844			673,603
Data Processing & Integrated Reservoir Geosciences	8,773			9,912
Corporate	45,388			44,416
Total(4)(5)	$	478,005		$	727,931

(1)	During the fourth quarter of 2011, the Company re-assessed its operating segments and concluded that its multi-client data library business is a separate operating segment.  Accordingly, prior periods have been restated.
(2)	The Company defines Adjusted EBITDA as net income (loss) (the most directly comparable GAAP financial measure) before Interest, Taxes, Other Income (Expense) (including foreign exchange gains/losses, loss on early redemption of debt, gains/losses from changes in fair value of derivative liabilities and other income/expense), Asset Impairments and Depreciation and Amortization.  The Chief Operating Decision Maker (“CODM”) primarily evaluates operating segment profitability through the use of this measure.  However, as the majority of operating costs directly associated with acquiring and processing multi-client data are capitalized and amortized based on a specific formula, the CODM also considers the impact of amortization expense when specifically evaluating multi-client’s segment profitability.
(3)	The North America proprietary segment shares certain productive assets used in its operations with the multi-client segment.  Those productive assets are presented as part of the North America segment.  Multi-client assets presented in the table above only include those assets specifically identified with the multi-client seismic data acquisition business such as cash, accounts receivable and the multi-client seismic data library.
(4)	During the first quarter of 2012, capital expenditures, including capitalized leases and capitalized depreciation to multi-client, totaled $1.1 million, $2.6 million, $17.7 million and $0.1 million for North America proprietary, international proprietary, multi-client and data processing and integrated reservoir geosciences, respectively.
(5)	During the third and fourth quarters of 2011, the Company recorded goodwill impairment charges totaling $132.4 million. Accordingly, since December 31, 2011, the Company had no goodwill.